Physical gold only exists in limited quantities. Combined with the precious metal’s industrial, aesthetic, and monetary applications — as well as its allure as a symbol of wealth and prosperity — this relative scarcity has made gold a coveted commodity utilized by governments and individuals around the world as a trusted store of wealth.
As with other commodities, factors like supply constraints and increased global demand can significantly impact market prices.
Mining conditions, for example, can affect how much gold is put into circulation. In 2020, for instance, COVID-19 pandemic–related lockdown policies caused mining to be halted, affecting output in several countries, including China, South Africa, Peru, Canada, and Mexico, according to the London Bullion Market Association. A drop in gold supply may contribute to price increases for the precious metal.
A rising need for gold in electronics production and other applications can also contribute to gold price increases. Jewelry fabrication, for instance, is another key source of gold utilization in some regions; in China, jewelry-related gold consumption rose 10% from 2022 to 2023, according to the World Gold Council (WGC).
The interest certain entities show in gold can also affect the overall demand for the precious metal.
Emerging market central banks, for instance, have increased their gold purchasing, and European banks have pulled back on selling the metal since the 2008 Financial Crisis, according to the WGC.
With central banks now placing a greater emphasis on keeping gold in their reserves, the sector has become a significant source of annual gold demand — which was evident in 2022, when central bank–related demand for gold reached a record level, showing a 152% increase from the previous year.
“Central banks were net sellers of gold until 2010, when the Global Financial Crisis caused an abrupt change in their practices,” says U.S. Money Reserve President Philip N. Diehl, who served as the 35th Director of the U.S. Mint. “Since January 2010, central banks have added an extraordinary net 7.9 thousand metric tons of gold to their vaults, or 3.6% of all the gold ever mined. This has had an extraordinary impact on prices since the banks have swung from being a significant source of supply to the market to, in recent years, a huge source of demand.”
A WGC survey released in June 2024 indicates that central bank demand may remain high. More than 8 in 10 banks say they expect reserve managers will continue to increase their gold holdings in the next 12 months.
Portfolio Holders Are Also Part of the Precious Metals Market
In addition to central bank–related gold demand, the investment interest in gold from consumers can also be considerable, as some of the U.S. Money Reserve reviews that have been shared online indicate. A number of the company’s clients say they have added gold and other precious metals to their portfolio.
In one of the U.S. Money Reserve reviews on the Better Business Bureau website, Rita D. says she’s “extremely glad” she switched from a SIMPLE IRA to a gold IRA. Another review from a portfolio holder states that they were able to move funds from IRA accounts that, for the past few years, had been declining by $1,000 a month to a gold-backed account.
Edward S., in another one of the U.S. Money Reserve reviews on the Better Business Bureau website, says the company helped him “go from my 401(k) that has been losing money to a gold [IRA] plan that is making me more return on my investment.”
Utah-based portfolio holder James E. was impressed that the U.S. Money Reserve representative he spoke with didn’t mention buying anything; instead, he asked what James knew about gold and silver and what his goals were. “He also asked questions to make sure he was addressing the correct need I had at that time,” James says in one of the U.S. Money Reserve reviews posted on Google. After connecting with the representative, “Within one day, I had my IRA transferred and backed by gold,” adds James E. “What a relief.”
Robert E. thanks the company for providing assistance when he set up a precious metals IRA. “Having someone watch over what is going on and helping me to diversify my portfolio is priceless,” Robert says in one of the U.S. Money Reserve reviews on the Better Business Bureau website. “[It] makes me sleep comfortably knowing I was able to lock in my life savings.”
How to Find Out More About Precious Metals
U.S. Money Reserve Account Executives are available to answer any questions you may have about precious metals and walk you through the process of establishing a self-directed IRA to ensure the account follows all the necessary guidelines.
Kenneth G. describes the U.S. Money Reserve representative he has worked with as extremely well-informed and efficient. “We have prospered under her supervision of our gold and silver selections and have been exceedingly pleased with her guidance,” Kenneth states in one of the U.S. Money Reserve reviews shared on Google.
In a review on the Better Business Bureau website, Eric L. also mentions the assistance U.S. Money Reserve provided when he reached out to the company for information. “[He] explained how gold and silver would help anchor my portfolio against the [ups] and downs of the stock market and retirement savings plans,” Eric says. “I appreciate his answers to many questions and the helpful information sent to my home and emails. A good relationship with [U.S] Money Reserve netted my first purchase — and [I’m] now considering another.”
U.S. Money Reserve client Ron K. thanks the company for facilitating his precious metal purchase in one of the U.S. Money Reserve reviews available on Google. “The coins were even better than described,” Ron says. “The price was amazing, and I would definitely recommend U.S. Money Reserve to anyone.”
To learn more about factors currently impacting gold prices, and to learn how gold and other precious metals could potentially factor into your saving plans, visit U.S. Money Reserve’s website — where you can find helpful articles, videos, and other resources — or call 1-833-845-1748 to speak to a representative from the company.
The post U.S. Money Reserve Examines What Makes Gold a Coveted Commodity and Which Factors Could Increase Gold Prices first appeared on From Frugal to Free.
Featured Image Credit: Shutterstock / RomanR.
